On Wednesday 11th December the Cypriot government approved a scheme to subsidise interest rates on loans.
As expected, hundreds of loan takers will be able to count on state support.
According to the press release, the scheme will be open to people who, in the period from 1 January 2022 to 31 December 2023, have received a housing loan with a variable interest rate, which is not aimed at restructuring the previous loan. In this case, the loan must be for the purchase or construction of the first real estate, including land. To receive state support, the loan amount cannot exceed 400 thousand euros and the annual family income - 50 thousand euros. One of the main conditions is that the applicant must pay all income taxes.
Detailed information on the new programme will be published on the website of the Land Department in the coming days. Applications will be accepted at citizen service centres from 2 January 2025 for two months. One of the main criteria for participation in the new programme is that monthly payments are made on time. The subsidy is expected to cover 50% of the increase in the interest rate between the date of the loan agreement and the date when payments start. The initiative will be supervised by the Cypriot Ministry of Finance. The total budget of the programme will be around €33 million.
It should be recalled that the government programme to subsidise mortgage interest payments in Cyprus started for the first time in the summer of 2020.
At that time, the effect of the government plan applied to loans contracted between 1 March and 31 December 2020. Due to its unprecedented popularity among the local population, the Cypriot government announced its extension until the end of 2021. It should be noted that the main conditions for receiving the government subsidy were that the housing loan should not exceed EUR 300,000 and the mortgage rate should not exceed 2.3 per cent. The subsidy was granted for 4 years and covered up to 1.5% of the mortgage rate.
This time, the beneficiaries of the plan are households with an annual family income of up to 50,000 euros who have taken out a mortgage of up to 400,000 euros between 1 January 2022 and 31 December 2023.